Facebook Acquires Instagram for $1B

Facebook Monday said it has reached an agreement to acquire Instagram for approximately $1 billion in a combination of cash and Facebook shares. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Instagram, which allows users to share only photos via its own social network, was originally launched as an iOS app. Just this past week, however, Instragram went live with an app for Android.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline, saying that Facebook and Instragam complement one another but that Facebook needs to be mindful about "keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook."

Zuckerberg said his company is committed to and growing Instagram independently. He wrote that the fact that Instagram is connected to other services beyond Facebook is an important part of the experience.

"We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook," Zuckerberg wrote.

Zuckerberg called the acquisition an important milestone for Facebook because it's the first time the company has ever acquired a product and company with so many users.

"We don't plan on doing many more of these, if any at all," he wrote. "But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together."

Kevin Systrom, CEO of Instagram, said via Instragram's official blog that he and co-founder Mike Krieger couldn’t be happier to announce that Instagram has agreed to be acquired by Facebook.

Systrom and Krieger started the company two years ago. In just 18 months the service had 30 million active users and was voted iPhone app of the year for 2011. In his post, Systrom stressed that Instragram is not going away.

"We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience," he wrote.